- FHA loans
FHA loan programs are particularly beneficial to those buyers with less available cash for a down payment. The rates on FHA loans are generally market rates, while down payment requirements are lower than for conventional loans.Some of the other benefits of FHA financing:
- Only a 3.5 percent down payment is required.
- Closing costs can be financed.
- Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
- More flexible underwriting criteria than conventional loans
- FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
- Loans are assumable to qualified buyers.